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State defers Showdown on Ga. Nuclear Plant Costs

By Ray Henry Associated Press | 8/12/2013, 12:07 p.m.
A debate over the rising cost of building a first-of-its-kind nuclear plant in Georgia will be pushed far into the ...
Regulators at the Public Service Commission were facing a legal dilemma ever since Southern Co. subsidiary Georgia Power asked in February to raise its construction budget for building two more nuclear reactors at Plant Vogtle by $737 million to $6.85 billion.

ATLANTA (AP) - A debate over the rising cost of building a first-of-its-kind nuclear plant in Georgia will be pushed far into the future.

Regulators at the Public Service Commission were facing a legal dilemma ever since Southern Co. subsidiary Georgia Power asked in February to raise its construction budget for building two more nuclear reactors at Plant Vogtle by $737 million to $6.85 billion.

That request raised expectations that PSC staffers would seek this month to block the utility from passing along some of its costs to customers, but that didn't happen. Instead, Southern Co. and Georgia utility officials recently reached a preliminary deal that would postpone a major budget debate until at least January 2018, when the first reactor is projected to come online.

A glimmer of the state's strategy emerged Friday in a report filed by nuclear engineer William Jacobs Jr. and PSC analyst Steven Roetger. Their report lays out the reasons why regulators could try to force the utility to absorb losses because of construction mishaps, but it stops short of recommending that regulators reject any spending now.

Georgia Power spokesman Mark Williams said all of the company's spending on the project has been in the best interests of its customers.

The utility's request to raise its budget triggered a quandary focused on the burden of proof.

If the utility exceeded its budget, then the burden was on Georgia Power to persuade regulators that the excess spending should be passed along to its customers. But if the PSC voted to raise the project budget, then the law would assume Georgia Power was entitled to collect all of its budgeted costs from customers, so long as regulators couldn't prove the spending was imprudent, reckless or somehow criminal.

As a result, PSC staffers had an incentive to raise any objections quickly, before the commission voted on whether to raise the project budget.

But under a preliminary agreement reached July 30, Georgia Power agreed to withdraw its request for a budget increase. Instead, it will ask utility regulators to approve its project spending at regular intervals. And regulators reserved the right to raise their objections in the future.